Tourist Refund Scheme

The Tourist refund scheme allows overseas tourists visiting the UAE to reclaim the VAT incurred on eligible purchases made through registered retailers, and came into effect on 18 November 2018.

Eligibility for Tourist Refund in UAE

“Overseas Tourist” is eligible for getting refund under tourist refund scheme. “Overseas tourist” means any natural Person who is not resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State.

Conditions for Tourist Refund Scheme

• 1.
• Goods must be supplied by supplier who is registered for a tourist refund scheme and goods should be supplied to overseas tourist who is in UAE during the purchase.

• 2.
• Tourist should intend to depart from UAE within 90 days from the date of purchase, accompanied by the goods.

• 3.
• The relevant Goods are exported by the overseas tourist to a place outside the Implementing States within 3 months from the Date of Supply.

Which goods are eligible for Tourist refund scheme?

Certain taxable goods except for:

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• Goods consumed fully or partly in UAE,

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• Goods that are not accompanied by the overseas tourist at the time of leaving UAE

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• Motor-vehicles, boats and aircrafts

How can someone apply for Tourist Refund Scheme in UAE?

Federal tax authority has appointed “Planet” as its exclusive tax refund operator for the tourist refund scheme, which was rolled out in November 2018. Merchant of goods should be registered for tourist refund scheme with “Planet Payment” to give benefit of the scheme to their overseas customer. If the Merchant is having more than one Retail shop, then all the shops should be registered. Documents required for getting registered with Planet Payment:

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• TRN Certificate

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• Trade License Copy

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• Specimen of the signature of the signatory

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• Power of Attorney (if the signatory’s name is not there on license)

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• Signed credit check consent form

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• Signed Contract with Planet Payment (Needs to be signed Online).

Procedure/Mechanism for Merchant

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• Once the merchant is registered, Planet Payment will send the “Merchant Pack” to each retail shop, which is registered for the Scheme.

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• “Merchant Pack” Includes a smartphone with the app pre-loaded, QR code tags, Point of Sale material, and training for the staff

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• Whenever any overseas tourist comes to the retail shop to make an eligible purchase, the shop assistant should capture the tourist information using the application and Tag the QR code on the back of the sales receipt.

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• Once the purchase is done, the Digital Tax-Free Form is created.

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• Minimum spend amount should be AED 250.

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• Cost to the Merchant:

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• here are no start-up, subscription or license fees, or upfront hardware costs for the merchant.

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• Merchant will be invoiced monthly for the total VAT,

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• Merchants can adjust their VAT return to effectively recover the VAT amount refunded.

What Tourist needs to do?

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• At the time of leaving UAE, tourist takes the goods and tagged receipt to the airport, seaport or border crossing.

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• The tourist goes to the Planet Validation Point before checking in and going through security.

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• Once it is validated, the tourist can choose the method of refund, that either tourist wants to get refund through credit card or Cash.

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• The tourist will receive 85% of the total VAT amount paid, minus an admin fee of 4.80 dirhams per Tax Free tag.

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• Tax-free tag needs to be validated within 90 days of the purchase date. If this is not done, the Tax-free tag expires and the refund cannot be claimed.

Article prepared by: NAIM ABBAS VIRANI – Assistant Manager, Premier Brains

DISCLAIMER:

This document is only for information purposes and should not be construed as an advice. It does not necessarily covers each aspect of the topic with which it deals. You should not act upon the contents of this document without receiving formal advice on your particular circumstances.

If you would like to discuss any VAT matters, please drop us an email at info@premier-brains.com or call us at + 971 4 3542959.